Contract Practice Flashcards
On your PwC project you mentioned “NBS Chorus”. What is that?
The software used to assemble the Contract Preliminaries.
You mentioned the Contractor would need some insurances, could you list some insurances the Contractor might need under a JCT D&B?
1) Contractor’s all risk
2) Professional Indenmity
3) Bonds (Performance bonds, material off-site bond).
On Chelsea Barracks & PWI, you stated working with Vesting certificate. What is this?
Used to confirm that the ownership of the goods, plant, or materials will transfer from one party to another on payment.
What are alternatives to a vesting certificate you could use?
Materials off-site bond.
What is a performance bond?
A performance bond is a form of security for the Employer or Developer.
It is a guarantee from the bank / insurance company to make payment to the employer should the Contractor default under the contract.
What was the value of the bond
1% of the Contract Sum, around £225,000
What is the typical cost of a performance bond?
It depends on the financial stability of the Contractor and the number of previous claims. But typically 1% of the contract sum.
Are you aware of any case law relating to Construction?
Ampleforth Abbey Trust vs Turner & Townsend
What value did the performance bond protect the Client?
10% of the Contract Sum.
What are signs a Contractor is financially unstable?
1) Word of mouth
2) Cashflow issues
3) Lack of personnel on site
4) Delays on site / poor quality
5) High cost in performance bond
What are the different kinds of performance bonds?
Conditional and On-demand
What is a conditional bond?
The Client must provide evidence that the Contractor has not met the terms of the Contract. They must also prove they have suffered financial loss.
